PIGS & Bears & a Bull
We advised our clients in late January that there might just be a high in the markets. This was that everyone was optimistic & we had said previously when we hear the word ‘boom’ next we sell. We haven’t gone that far but to use another’s term we are being ‘strategically cautious’. Hence we are lightening our portfolios.
There are several major global concerns for 2010 and you don’t want to be caught in between the PIGS & the Bear.
1. ‘G’ which stands for Greece has a total debt of 113% of GNP & last year’s budget deficit of 12.7% of GNP. Hence the need to fund these deficits means the yield is 7.162% today & the insurance against sovereign default has also risen. P = Portugal & S= Spain are no different. I = Ireland & UK where they have had serious house price falls are no different.
What does this mean do you? Well it means that money retreats from the Euro & Pound to the global reserve currency $US and this appreciates against all as the $US is ‘less bad’. Hence you may see the $AUS fall 10c from today’s 90c.
2. The big players in Wall Street will use their strengthening $US to also retreat to. They have made plenty since the $AUS was ~62c & arrived here when markets were very low. Did BHP hit $24? Now is the time for them to repatriate their funds & repeat the downswing or maybe a 2nd leg of the W. This is called the ‘carry trade’. Even when companies produce good results funds are ‘selling the fact’.
3. A third factor is China which has been the ‘Bull’ in the 2009 year. However after all the easy stimulus & credit expansion of 2009 [31% in 2009] the 9 men on the China ‘board’ have decided that is enough. It has caused inflation there to be 1.9% pa in December 09 which is triple November 09. Hence they have reduced lending target by 20%. A reduction in China demand will have a reduction in AUS resource prices.
4. A Victorian stockbroker has listed 50 reasons to be very aware of the Bear & these include bank bashing everywhere, Resources taxes, Woolies with fewer sales after stimulus and other.
5. Here is another 20 reasons why the global debt time bomb may explode soon from another commentator.
It is interesting that the RBA did not raise the official cash rate on 2nd February 2010. Just maybe they don’t want the $AUS too high & harder for exporters but great for travelers. On the other hand after reading that first house buyers made up only 13% of the market the RBA didn’t want property to become even more unaffordable. They may have read what ‘mortgage stress’ these first home buyers are under after being manipulated by government grants [why didn’t you get one?] & low interest rates. A family needs 100K income to live & support a loan which must limit house prices. They can’t keep going up as incomes have a ceiling.
Hence we repeat our theme; ‘control what you can control’ reduce those debt levels as our clients have done. Our active wealth strategy means as a first step with a principal loan reduction of 1K to 2k to 3k on average per month.
Of course if you have a super fund that isn’t proactive then you need an ‘active’ adviser.
Welcome to call on 07 3848 1088, email or book on our websites.
John McAuliffe
Can you help my son?
Can you help my son?
Can you help my son was the question today from a client. The client says that his son’s partner is now expecting & hence his son should have some cover.
The client is very aware of the need for cover as his wife has just had a trauma cover payout as she has cancer. This trauma payout was sufficient to pay out the mortgage for the client.
So can we help the son or rather the son’s partner or rather the up coming grand child. Yes, of course we can. The son only knows he has ‘not much super’ & we know for sure that he will have insufficient life cover should that event occur. How much is sufficient?
There are plenty of calculators on http://www.lifewise.org.au/Default.aspx to work that out. However back of envelope suggests more than 1 million. The family would prefer to have a rent free house paid off say 400k – 500k and then capital of 1 million to provide the income so as there is no reduction in family standards. The mother should be allowed to be the mother & who knows how many will be in the family.
We could argue the same amount for total & permanent disability. We all are aware of the efforts in looking after elderly parents or what is even more telling bring up autistic or other disadvantaged children. A huge amount of time, money, emotions is required along with much more support. Hence total disability needs more cover than the average industry fund provides & certainly more advice. These may seem large amounts but all can be tailored to the son’s needs & income.
Of course there is also income protection which as a recent TV advt says ‘isn’t it time you discussed income protection’? as more than ‘50% of household run out of money in a month.’ As most are aware this is taxx deductible. It is also generally better outside super due to constraints on super trustees from super legislation. The son can’t rely on others to meet his rent, car expenses & living costs as they have their own challenges.
We repeat ‘all can be tailored according to the budget’ & after 25 years in this service we find that 2-3 dollars per day maximum provides useful cover.
Of course at the age of 28 this son needs to start looking after his next 28 years & his responsibilities. His partner might start suggestion houses. Unfortunately they won’t have sufficient deposit although pre CFG they might be given a loan. Hence they need to build a 20% deposit, decide what school they will send the children & it is the only house they will buy. The bank or the mortgage broker will want to flog them a loan too early & this may not be for the child’s benefit in the future. The family needs 2 incomes to meet most loans.
Hence we offer the same opportunity as for the son. I.e. a complimentary meeting with a non-aligned wealth coach & we have been a member of the FPA since its inception. We have been a member of the AFA for 26 years.
Do you have sufficient cover & if not we are here to help you. Welcome to email, call on 3848 1088 or book on our websites.
John McAuliffe
Can you help my son was the question today from a client. The client says that his son’s partner is now expecting & hence his son should have some cover.
The client is very aware of the need for cover as his wife has just had a trauma cover payout as she has cancer. This trauma payout was sufficient to pay out the mortgage for the client.
So can we help the son or rather the son’s partner or rather the up coming grand child. Yes, of course we can. The son only knows he has ‘not much super’ & we know for sure that he will have insufficient life cover should that event occur. How much is sufficient?
There are plenty of calculators on http://www.lifewise.org.au/Default.aspx to work that out. However back of envelope suggests more than 1 million. The family would prefer to have a rent free house paid off say 400k – 500k and then capital of 1 million to provide the income so as there is no reduction in family standards. The mother should be allowed to be the mother & who knows how many will be in the family.
We could argue the same amount for total & permanent disability. We all are aware of the efforts in looking after elderly parents or what is even more telling bring up autistic or other disadvantaged children. A huge amount of time, money, emotions is required along with much more support. Hence total disability needs more cover than the average industry fund provides & certainly more advice. These may seem large amounts but all can be tailored to the son’s needs & income.
Of course there is also income protection which as a recent TV advt says ‘isn’t it time you discussed income protection’? as more than ‘50% of household run out of money in a month.’ As most are aware this is taxx deductible. It is also generally better outside super due to constraints on super trustees from super legislation. The son can’t rely on others to meet his rent, car expenses & living costs as they have their own challenges.
We repeat ‘all can be tailored according to the budget’ & after 25 years in this service we find that 2-3 dollars per day maximum provides useful cover.
Of course at the age of 28 this son needs to start looking after his next 28 years & his responsibilities. His partner might start suggestion houses. Unfortunately they won’t have sufficient deposit although pre CFG they might be given a loan. Hence they need to build a 20% deposit, decide what school they will send the children & it is the only house they will buy. The bank or the mortgage broker will want to flog them a loan too early & this may not be for the child’s benefit in the future. The family needs 2 incomes to meet most loans.
Hence we offer the same opportunity as for the son. I.e. a complimentary meeting with a non-aligned wealth coach & we have been a member of the FPA since its inception. We have been a member of the AFA for 26 years.
Do you have sufficient cover & if not we are here to help you. Welcome to email, call on 3848 1088 or book on our websites.
John McAuliffe
We managed to save $24 000 over the last 6 months and that doesn't include our tax refund or cash earnings either.
We managed to save $24 000 over the last 6 months and that doesn't include our tax refund or cash earnings either.
“Hoping you all had a lovely Christmas. WA was absolutely perfect for us, very peaceful and lazy.
Back at work this week and homework done.
We managed to save $24 000 over the last 6 months and that doesn't include our tax refund or cash earnings either. We're very satisfied with how we've weathered the GFC despite our reduced investment performance.
Happy New Year John!
Sue”
Yes we do have success when clients have success. We find that clients who do their monthly homework do have success as their homework helps them understand & achieve our active wealth strategy.
It is actually part of a very simple strategy where they pay their mortgage before they pay themselves. When we look at their HW we note $16,726 from dividends & taxx refund which accelerates their mortgage reduction even further.
These are average clients i.e. a public servant, working spouse & 2 expensive boys in later years of schooling.
As recent job figures suggest that iinterest rates might climb another 0.75% then it makes sense to reduce debt as fast as you can. However the key do doing so is the strategy & capturing the lost $3,068 that average families can’t define over a year. Also capturing the second income would make, no does make, a serious dent in the mortgage.
What about the dividends & taxx refund. Well as super is legislated & has taxx concessions it poses government risk of manipulation. It also doesn’t provide an additional income to reduce your mortgage debt. Hence even more restructuring & coaching is required to reduce both rates & taxx over time.
The reality is that your super maybe inaccessible & the government pension [which is a Ponzi scheme] is now not available to age 67. Hence additional capital is necessary & on average we aim to achieve an additional ½ million [today’s $] for clients.
We are not mortgage brokers but a non aligned wealth coach with an AFSL. Recall the bank or mortgage broker flogs the loan & paying it back is your challenge. We also read 15/01/10 that customers of the big four banks are unhappy. Well the big four will be happy if you stay with them. Fixing rates only handcuffs you to the bank & those with a rental property usually could be structured more efficiently.
We expect these clients to have their bad mortgage debt to Zero by the next Christmas break. We imagine these clients will really enjoy that holiday. They do have a reasonable lifestyle.
Yes there are other testimonials on our websites that may help you make the next step.
Welcome to call on 07 3848 1088, email or book on our websites.
John McAuliffe
“Hoping you all had a lovely Christmas. WA was absolutely perfect for us, very peaceful and lazy.
Back at work this week and homework done.
We managed to save $24 000 over the last 6 months and that doesn't include our tax refund or cash earnings either. We're very satisfied with how we've weathered the GFC despite our reduced investment performance.
Happy New Year John!
Sue”
Yes we do have success when clients have success. We find that clients who do their monthly homework do have success as their homework helps them understand & achieve our active wealth strategy.
It is actually part of a very simple strategy where they pay their mortgage before they pay themselves. When we look at their HW we note $16,726 from dividends & taxx refund which accelerates their mortgage reduction even further.
These are average clients i.e. a public servant, working spouse & 2 expensive boys in later years of schooling.
As recent job figures suggest that iinterest rates might climb another 0.75% then it makes sense to reduce debt as fast as you can. However the key do doing so is the strategy & capturing the lost $3,068 that average families can’t define over a year. Also capturing the second income would make, no does make, a serious dent in the mortgage.
What about the dividends & taxx refund. Well as super is legislated & has taxx concessions it poses government risk of manipulation. It also doesn’t provide an additional income to reduce your mortgage debt. Hence even more restructuring & coaching is required to reduce both rates & taxx over time.
The reality is that your super maybe inaccessible & the government pension [which is a Ponzi scheme] is now not available to age 67. Hence additional capital is necessary & on average we aim to achieve an additional ½ million [today’s $] for clients.
We are not mortgage brokers but a non aligned wealth coach with an AFSL. Recall the bank or mortgage broker flogs the loan & paying it back is your challenge. We also read 15/01/10 that customers of the big four banks are unhappy. Well the big four will be happy if you stay with them. Fixing rates only handcuffs you to the bank & those with a rental property usually could be structured more efficiently.
We expect these clients to have their bad mortgage debt to Zero by the next Christmas break. We imagine these clients will really enjoy that holiday. They do have a reasonable lifestyle.
Yes there are other testimonials on our websites that may help you make the next step.
Welcome to call on 07 3848 1088, email or book on our websites.
John McAuliffe
Some investment ideas for 2010
Some investment ideas for 2010
We have discussed frequently that a major & safest objective is to reduce our debt levels. When the average mortgage debt is 367,000 then someday it is meant to be paid. The GFC reminded us all that that is a very comfortable strategy. Remember that the average means that 50% have debts greater than 367,000.
The fact that big spending governments & property spukiers haven’t yet to hede the message suggests that another reminder is around the corner. At the very least they will have to adjust to higher rates.
However our active wealth strategy has the philosophy that owning the home is not sufficient. If we need 1,000 to live on per week then we need 1 million in capital outside the house. The house & its capital does not produce an income. Hence we need to consider investing elsewhere.
We believe that your home is sufficient property to own. We only need to push the stroller around the block to recognise a rental property & how well tenants look after property. Most landlords are reluctant to raise the rental & hence they never earn the fair return. We believe that positive cashflow only occurs in property spukiers modeling.
Let’s look at some other investment themes & recall that Australia is say 2% of global economy
We hear the China story but there is the ‘other China’ i.e. the Chinese dispora be it here in Australia, Singapore and Taiwan or through Asia. We only need to return here from there to know of their industry, high tech & work ethic. Taiwan's relationship with China has significantly improved & hence great growth potential.
Another & very close to home personally is South Korea. You would struggle [in fact wont]to find a 4 bedroom unit in Brisbane but many Koreans live in such. They have more PhD per head than anywhere else on the planet. Who doesn’t have a Samsung or Hyundai product & both of these have higher ratings than Sony or Mercedes?
Even closer to home is Indonesia & a top 20 country. There have been significant government reforms & remember we only read the bad headlines in the Australian press.
Two other economies that have been getting the bad press have been Japan & the US. Japan has had deflation for a cycle of 17 years & has some great brands. It is after all the 2nd largest economy. Then the $US has fallen & is being rubbished quite reasonably. But it is the world currency & if we check out the big Mac index it is undervalued. What is down goes up sometimes?
What has also gone up of late is gold & China. Just maybe they are due for a correction.
We suggest these ideas as Australian property is not the only investment available.
The top 20 Australian shares make up 70% of the Australian index. Those SMSF & others sitting with cash can’t sit there for ever. The Accelerator Principal which we read in Samuelson in Economics 101 states that if you are standing still then you are going backwards relative to others.
We welcome you to a meal to discuss how our active wealth strategy & how to structure debt & build the portfolio.
John McAuliffe
We have discussed frequently that a major & safest objective is to reduce our debt levels. When the average mortgage debt is 367,000 then someday it is meant to be paid. The GFC reminded us all that that is a very comfortable strategy. Remember that the average means that 50% have debts greater than 367,000.
The fact that big spending governments & property spukiers haven’t yet to hede the message suggests that another reminder is around the corner. At the very least they will have to adjust to higher rates.
However our active wealth strategy has the philosophy that owning the home is not sufficient. If we need 1,000 to live on per week then we need 1 million in capital outside the house. The house & its capital does not produce an income. Hence we need to consider investing elsewhere.
We believe that your home is sufficient property to own. We only need to push the stroller around the block to recognise a rental property & how well tenants look after property. Most landlords are reluctant to raise the rental & hence they never earn the fair return. We believe that positive cashflow only occurs in property spukiers modeling.
Let’s look at some other investment themes & recall that Australia is say 2% of global economy
We hear the China story but there is the ‘other China’ i.e. the Chinese dispora be it here in Australia, Singapore and Taiwan or through Asia. We only need to return here from there to know of their industry, high tech & work ethic. Taiwan's relationship with China has significantly improved & hence great growth potential.
Another & very close to home personally is South Korea. You would struggle [in fact wont]to find a 4 bedroom unit in Brisbane but many Koreans live in such. They have more PhD per head than anywhere else on the planet. Who doesn’t have a Samsung or Hyundai product & both of these have higher ratings than Sony or Mercedes?
Even closer to home is Indonesia & a top 20 country. There have been significant government reforms & remember we only read the bad headlines in the Australian press.
Two other economies that have been getting the bad press have been Japan & the US. Japan has had deflation for a cycle of 17 years & has some great brands. It is after all the 2nd largest economy. Then the $US has fallen & is being rubbished quite reasonably. But it is the world currency & if we check out the big Mac index it is undervalued. What is down goes up sometimes?
What has also gone up of late is gold & China. Just maybe they are due for a correction.
We suggest these ideas as Australian property is not the only investment available.
The top 20 Australian shares make up 70% of the Australian index. Those SMSF & others sitting with cash can’t sit there for ever. The Accelerator Principal which we read in Samuelson in Economics 101 states that if you are standing still then you are going backwards relative to others.
We welcome you to a meal to discuss how our active wealth strategy & how to structure debt & build the portfolio.
John McAuliffe
Future Shock
Future Shock
Some thirty plus years ago in the 1970’s ‘Future Shock’ by Alvin Toffler was a very popular book. In fact we should go back & reread it to see how close he was to what is happening today. Certainly George Orwell and 1984 is very relevant in today’s big government knows better present. Animal Farm is also very close to the mark.
What could be some future shocks in 2010 & are we prepared for them. From our observation many here believe that the GFC has gone & life is good & let’s go back & buy more even if that means more debt.
There is plenty of future shock to come in 2010 & it’s all concerned with debt levels.T
The good old USA has a current account deficit of 1 TRILLION+ per year forever. So who is going to lend to the USA unless their rates go up. Of course with 35 million on food stamps in USA [1in 4 children & 1 in 8 adults line up at soup kitchens] that is not a desired outcome either. With unfunded liabilities of pension & health costs we read that there is a better standard of living In Haiti than USA. Rates going up in USA will force asset prices down. Let’s remember the GFC & US house prices down by 40+%.
We now read of the PIIGS. I.e. Portugal, Italy, Ireland, Greece, Spain who all have high deficits & hence need to borrow more. [Spain has an unemployment rate of 30% & a deficit of 10% of GNP]. So they are all caught between a rock of rising interest rates to attract savings & the rock of unemployment which needs small business & lower rates. If we are going to travel then Euro land could be good value as the Euro heads down. We will watch with interest.
Is Australia any different? Gail @ Westpac AGM warns of higher interest rates. Our client today is suggesting 10% on his mortgage. Wayne is swanning around big spending to win the headlines with no recession stories. The RBA is suggesting enough is enough & raising rates. What if the RBA rate does go higher by another 1% or 2%?
Barnaby is suggesting that even Queensland is tottering & hence the asset sales & increasing state taxes to reduce debt levels. Queensland will need to borrow & just another entity needing a ‘swag’ of money. Why should you [the government] pay for my health & education costs?
Hence the cushion for the 2010 future shock is still the same- a strategy to reduce the personal debt levels.
We only heard today of a family with 3 boys each parent just losing their job. Saving, perhaps built up as equity, helps for a period of readjustment. This can only be done with the right strategy which also requires discipline.
We also advised clients today not to be sucked in by the 50% tax break on various business deductions available from the government. They are only going to buy what they can’t afford to service. Of course these ‘assets’ say cars & computers are worth 50% or less in 2-3 years. Why buy in the first place.
Of course they will get different advice from the bank that will of course say yes & now see the loan arranger or advisers who will increase your loans. And of course servicing it & living & the stress that goes with it is your problem because the bank has made the sale. It is the wrong advice in most cases. What is good for the bank or government is generally not good for you.
We are here to provide advice & that means it what you need to hear & not what you want to hear. Our active wealth strategy may save you from future shock
Welcome to call on 07 3848 1088 or email or visit our websites.
John McAuliffe
Some thirty plus years ago in the 1970’s ‘Future Shock’ by Alvin Toffler was a very popular book. In fact we should go back & reread it to see how close he was to what is happening today. Certainly George Orwell and 1984 is very relevant in today’s big government knows better present. Animal Farm is also very close to the mark.
What could be some future shocks in 2010 & are we prepared for them. From our observation many here believe that the GFC has gone & life is good & let’s go back & buy more even if that means more debt.
There is plenty of future shock to come in 2010 & it’s all concerned with debt levels.T
The good old USA has a current account deficit of 1 TRILLION+ per year forever. So who is going to lend to the USA unless their rates go up. Of course with 35 million on food stamps in USA [1in 4 children & 1 in 8 adults line up at soup kitchens] that is not a desired outcome either. With unfunded liabilities of pension & health costs we read that there is a better standard of living In Haiti than USA. Rates going up in USA will force asset prices down. Let’s remember the GFC & US house prices down by 40+%.
We now read of the PIIGS. I.e. Portugal, Italy, Ireland, Greece, Spain who all have high deficits & hence need to borrow more. [Spain has an unemployment rate of 30% & a deficit of 10% of GNP]. So they are all caught between a rock of rising interest rates to attract savings & the rock of unemployment which needs small business & lower rates. If we are going to travel then Euro land could be good value as the Euro heads down. We will watch with interest.
Is Australia any different? Gail @ Westpac AGM warns of higher interest rates. Our client today is suggesting 10% on his mortgage. Wayne is swanning around big spending to win the headlines with no recession stories. The RBA is suggesting enough is enough & raising rates. What if the RBA rate does go higher by another 1% or 2%?
Barnaby is suggesting that even Queensland is tottering & hence the asset sales & increasing state taxes to reduce debt levels. Queensland will need to borrow & just another entity needing a ‘swag’ of money. Why should you [the government] pay for my health & education costs?
Hence the cushion for the 2010 future shock is still the same- a strategy to reduce the personal debt levels.
We only heard today of a family with 3 boys each parent just losing their job. Saving, perhaps built up as equity, helps for a period of readjustment. This can only be done with the right strategy which also requires discipline.
We also advised clients today not to be sucked in by the 50% tax break on various business deductions available from the government. They are only going to buy what they can’t afford to service. Of course these ‘assets’ say cars & computers are worth 50% or less in 2-3 years. Why buy in the first place.
Of course they will get different advice from the bank that will of course say yes & now see the loan arranger or advisers who will increase your loans. And of course servicing it & living & the stress that goes with it is your problem because the bank has made the sale. It is the wrong advice in most cases. What is good for the bank or government is generally not good for you.
We are here to provide advice & that means it what you need to hear & not what you want to hear. Our active wealth strategy may save you from future shock
Welcome to call on 07 3848 1088 or email or visit our websites.
John McAuliffe
Its New Year review time
Its New Year review time
It often time to reflect on our past progress & what do we need to change if we are to achieve our goals. These times come at some significant moment in our lives be life, death, marriage, divorce, new job, redundancy, change of government or change of season. If there is no change then we arrive at the same destination which may or may not be where we want to go.
So that is the first reflection i.e. goals & they always need a time frame & need to be achievable. Are they written down as that alone means they will probably be achieved.
Let’s make some suggestions;
Have you made a SWOT analysis of your personal finances i.e. strengths, weaknesses, opportunities, threats?
Have you financially progressed over the year? I.e. Has your net wealth [assets minus liabilities] improved?
Is your net income greater than your gross expenses? Do you have credit card debt as this will be a great indicator of all of these questions?
These are questions that all governments are not asking & hence we have downgrading in Dubai, Greece, Spain & UK & USA pushing their luck. Interest rates are only going up as savers always want security or a higher return on their funds.
What do you want your net position to be in 3 years time? How are you going to achieve it?
Let’s look at a family’s expenses. We note that our average client family after their mortgage needs 4000pm+ as a reasonable lifestyle. Any more than that means a longer working life & this is your choice. It is no use having that 2nd income if it is for the outlandish pool [as next door to us] or the status car when the two sensible alternatives are reducing debt or building investments.
Have you reviewed the mortgage? The big Four hold 70% of all mortgages & 90% of new mortgages & are charging more. Hence a review as there is competition around is always smart. But that isn’t sufficient as the key to reducing the debt is the strategy of paying the debt first & then yourselves second.
Have you worked out the impact of future interest rate rises?
Will you have that 1 million we all need on retirement & remember that doesn’t include the home as that doesn’t produce an income?
Do you have the right or taxx efficient structure for your investments? Do you have the right people advising you on these?
What advice is your industry super fund giving?
Do you have the rental property structured correctly or does the accountant ‘guess’ how much interest you paid on your rental property?
Could you manage on one income?
Do you have a handy sheet with all family contact details?
If the bus hits you today & it does each day in each state hit someone then will the mortgage be paid off & will the family have the same lifestyle.
If the forest fire hits will you be like the 25% of affected Victorians who had no house or car insurance. Is the chook raffle sufficient to help the helpless?
Have you and the partner updated or even made the will as it will be needed one day.Do you have an exit strategy from the business?
Do you know when you will retire & how much will you need.
If you had that heart attack today do you have enough money to recovery from it & take time off work? Are you doing everything to prevent the heart attack?
Have you maximised your super as it is a 15% taxx haven at present.
If you are 55 have you taken a ‘transition to retirement’ as then the taxx within is Zero?
We easily could make another 50 suggestions.
One would be to call on 3848 1088 or email on info@wealthcoach.net.au or book on our websites www.wealthcoach.net.au or www.wecoachwealth.com.au
We meet energy with energy & here to help you help yourselves.
John McAuliffe
It often time to reflect on our past progress & what do we need to change if we are to achieve our goals. These times come at some significant moment in our lives be life, death, marriage, divorce, new job, redundancy, change of government or change of season. If there is no change then we arrive at the same destination which may or may not be where we want to go.
So that is the first reflection i.e. goals & they always need a time frame & need to be achievable. Are they written down as that alone means they will probably be achieved.
Let’s make some suggestions;
Have you made a SWOT analysis of your personal finances i.e. strengths, weaknesses, opportunities, threats?
Have you financially progressed over the year? I.e. Has your net wealth [assets minus liabilities] improved?
Is your net income greater than your gross expenses? Do you have credit card debt as this will be a great indicator of all of these questions?
These are questions that all governments are not asking & hence we have downgrading in Dubai, Greece, Spain & UK & USA pushing their luck. Interest rates are only going up as savers always want security or a higher return on their funds.
What do you want your net position to be in 3 years time? How are you going to achieve it?
Let’s look at a family’s expenses. We note that our average client family after their mortgage needs 4000pm+ as a reasonable lifestyle. Any more than that means a longer working life & this is your choice. It is no use having that 2nd income if it is for the outlandish pool [as next door to us] or the status car when the two sensible alternatives are reducing debt or building investments.
Have you reviewed the mortgage? The big Four hold 70% of all mortgages & 90% of new mortgages & are charging more. Hence a review as there is competition around is always smart. But that isn’t sufficient as the key to reducing the debt is the strategy of paying the debt first & then yourselves second.
Have you worked out the impact of future interest rate rises?
Will you have that 1 million we all need on retirement & remember that doesn’t include the home as that doesn’t produce an income?
Do you have the right or taxx efficient structure for your investments? Do you have the right people advising you on these?
What advice is your industry super fund giving?
Do you have the rental property structured correctly or does the accountant ‘guess’ how much interest you paid on your rental property?
Could you manage on one income?
Do you have a handy sheet with all family contact details?
If the bus hits you today & it does each day in each state hit someone then will the mortgage be paid off & will the family have the same lifestyle.
If the forest fire hits will you be like the 25% of affected Victorians who had no house or car insurance. Is the chook raffle sufficient to help the helpless?
Have you and the partner updated or even made the will as it will be needed one day.Do you have an exit strategy from the business?
Do you know when you will retire & how much will you need.
If you had that heart attack today do you have enough money to recovery from it & take time off work? Are you doing everything to prevent the heart attack?
Have you maximised your super as it is a 15% taxx haven at present.
If you are 55 have you taken a ‘transition to retirement’ as then the taxx within is Zero?
We easily could make another 50 suggestions.
One would be to call on 3848 1088 or email on info@wealthcoach.net.au or book on our websites www.wealthcoach.net.au or www.wecoachwealth.com.au
We meet energy with energy & here to help you help yourselves.
John McAuliffe
An invitation to you to meet over lunch
Let’s remind you what we offer. We offer the opportunity to discuss here over lunch or some other suitable time your personal financial position. Let’s face it, it just might need a financial tune-up & you have wondered where to turn. If the car has a regular tune up & the dentist suggests every 6 months then it also makes sense with your finances.
Yes it is possible that the super fund you are in is the cheapest with the best performance ever but that is only part of your financial challenge. You get what you pay for & you are not paying for advice. Then there is always your mortgage & are you paying that first before you pay yourself as that debt word is a four letter word. Your mortgage debt should be your first priority. What happens when rates increase or when the employer makes you redundant or when there is one income as family is expected? What happens as we often see that you will retire & your super is required to pay out the mortgage.
Then there is the taxx man. There is a discussion to raise the super contributions from 9% to 12%. Surely that is another taxx as it is your income which you can’t spend or invest. You only need to look at your net or take home pay after all the deductions & mortgage interest to be well aware that it is a struggle to survive. We only a fortnight ago explained to a young cop with 2 children that many were like him – they couldn’t afford the fine as they were surviving only to the next pay. We did point out we had no sympathy for the idiot on the road & should be treated as an idiot. A fine is another taxx & yes the state government needs the cash.
We have recently helped a couple aged 48 with a $340,000 mortgage which means unless they are disciplined they will certainly need his super to pay down his debt. However with our active wealth strategy it is projected to be paid out in 9.4 years & to later retire on 67,000p.a.
We have seen at least two others our age & who should be retired who have said they are willing to work to age 70 because their position means they can’t do otherwise. They will need also our wholestic health story.
We have seen those with rental property where there was a $9000 dollar p.a. shortfall between income & expenses. That makes living & explaining to the spouse a challenge & a hope that property markets will always go up.
We have seen a lady who has 2 million in assets but property & super aren’t very liquid should a major trauma or illness occur.
We saw on Saturday another lady who has just separated & although better than most with own house & useful super it will need care & attention if she is to retire on what she currently earns.
We have others wanting us to be the ‘go to’ man as a call centre isn’t good enough.
Every person has their own challenges & as an ex math’s teacher we do like to have a solution to each problem.
As our 7 year old daughter is on camp today we have had the opportunity to spring clean the house. What a difference & so much more space. We all need to spring clean our finances occasionally.
We do have many other ideas as many haven’t considered estate planning or spouses super or looking after the small shareholder in a business. Every one needs a non aligned approach which is what we offer.
Of course there is our active wealth strategy which looks at your overall financial position & helps you to achieve your goals. We provide 24 / 6 support for your benefit.
Welcome to email or book via our website www.wealthcoach.net.au or www.wecoachwealth.com or call on 07 3848 1088 for that opportunity to discuss & financially progress. After 25 years in financial service we care if you care enough to call or email us.
John McAuliffe